Hatch resident lodges complaint against lawmaker

LAS CRUCES — The New Mexico Secretary of State's Office is reviewing a campaign finance-related complaint filed against State Rep. Andy Nuñez, R-Hatch.

The ethics complaint, filed in recent weeks by Hatch resident Linda Alvarez, is more extensive than — but does have some overlap with — a complaint lodged against Nuñez by the progressive group ProgressNow New Mexico in mid-August. Alvarez has alleged Nuñez's campaign spending reports show potential embezzlement and double-dipping from campaign and taxpayer funds for the same events.

Nuñez, who's seeking re-election to his District 36 seat against Democrat Nathan Small, this month has filed a formal response to Alvarez's complaint. He contends there's no basis for the allegations, and he'll be cleared in the Secretary of State's findings.

Alvarez, a paralegal and small farm owner, filed the complaint, dated Sept. 30, with the Secretary of State's Office, triggering a formal review process by that agency. She claims Nuñez's campaign finance reports — required to be filed periodically under state law — show irregularities in the accounting for self-loans and personal reimbursements indicating potential embezzlement of $32,207 or more. In particular, the reports carried a level or growing amount of campaign debt from loans Nuñez made to his campaign. And, while Nuñez on a number of occasions made expenditures to himself from the campaign to repay portions of that campaign debt, the level of debt didn't correspondingly shrink and allowed for future reimbursements of the same already-reimbursed debt.

"Rep. Nuñez has raised the bar on creative accounting by developing a sophisticated system of loans and reimbursements that apparently allowed him to line his pockets many times over for the same expense," she wrote in the complaint.

The complaint highlights an instance in Nuñez's 2014 2nd General Election report, which showed a $456 loan Nuñez made to his campaign, taking the campaign debt level to $10,030. In the same report, a $456 expenditure was made from the campaign to Nuñez for mileage reimbursement. However, the carryover debt into the next financial report — the 3rd General Election Report — remained at $10,030 and didn't decrease by $456, according to the campaign finance reports. Later on, in 2015, there is a repayment of a $456 the campaign debt, according to the reports.

In the last few months, Nuñez has filed a wave of amendments to original reports filed several years ago. One of those amendments has removed the $456 as an October 2014 expenditure, though it does stay on the reports as a loan repayment to Nuñez in 2015.

Attorney Anthony Trujillo, who's representing Nuñez, said problems exist with the accuracy of the campaign finance reports that are produced after candidates enter data into the online system.

"There are significant system issues with the database and the accuracy of the reports," he said. "It's a system-wide issue, and it's not just limited to Mr. Nuñez."

In addition, Trujillo said "long-time" legislators such as Nuñez experienced some problems making the switch between filing paper reports and online reports. Trujillo said he's confident Nuñez will be cleared in the Secretary of State's investigation.

"We believe the allegations lack merit," he said.

The Secretary of State's Office allows a certain period of time for Nuñez to respond to the complaint. He sent a one-page letter dated Oct. 14 that addresses aspects — but not all — of Alvarez's allegations. He wrote that he's "never entered any number in any category that I feel were illegitimate."

"... I stand by all of my reports and will defend them if required," according to the letter. "I have never used Campaign funds to subsidize my lobbying work, or as my position Mayor of Hatch (sic)."

Nuñez, who's also mayor of the village of Hatch, stated he's hired an attorney to "take Ms. Alvarez to court for calling me an embezzler."

Under review

Ken Ortiz, spokesman for the Secretary of State's Office, said the office has received Nuñez's letter.

"He's responded, and it's under review at this time," he said.

Because Alvarez's complaint is quite detailed and the office is also dealing with other work, it could take some time for staff to thoroughly analyze the case and make recommendations to Secretary of State Brad Winter for a final determination, officials said. There's not an estimated time line.

"We're trying to process complaints as timely as possible," said Kari Fresquez, elections director and chief information officer for the agency.

Alvarez's complaint alleges Nuñez double-dipped by collecting reimbursement from the state for lawmaker-related trips, as well as collecting payment for the same trips from campaign expenses. This mirrors an allegation in a complaint filed by ProgressNow with the state attorney general's office.

Ortiz said the Secretary of State's Office staff have seen media reports about the ProgressNow complaint but they haven't received it at that agency.

'I lose money'

Nuñez, in an interview with the Sun-News, said he believes expenses he incurs as a legislator can be reimbursed from his campaign funds. He said he's never actively solicited campaign funds, but rather has a number of supporters who voluntarily send him donations. He said with the travel lawmakers must do to various committee meetings across the state and to dignitary events, expenses rack up quickly. He pays a lot out of pocket that doesn't get reimbursed, he said.

"I lose money for being a representative," he said. "I haven't made any."

Nuñez said he hasn't spent campaign funds for his job as a lobbyist, which he had during a stint in 2013 and 2014 after losing a re-election bid. He said he can justify all of his expenditures. If he was trying to do something illegal, he said, he wouldn't have reported financial activities, but he did report them, he said.

Nuñez faced some scrutiny in 2015 over campaign finances, and he came out in the clear. He argued that the recent complaints are politically motivated to support his opponent.

"I'll respond to all of them," he said. "I'm above-board. That's the way it's going to stay."

Alvarez said her own involvement in reviewing Nuñez's finances began over the past year. She grew up in Hatch but moved away for her career. However, she inherited a small parcel of land and wanted to start a farm on it. As that project got underway in 2015, she eventually began attending village trustee meetings because she'd grown up with many of the people who are currently in leadership.

"I began to observe the politics of the village of Hatch," she said.

Alvarez began filing Inspection of Public Records Requests with the village after she saw what she thought were some red flags. That led into her examination throughout 2016 of Nuñez's campaign spending reports and her filing Oct. 3 of the complaint with the Secretary of State. She noted Nuñez has claimed she's campaigning on Small's behalf. She said she's not affiliated with Small's campaign, though she does support him and will vote for him.

Limited powers

Alvarez's complaint also takes aim at the flurry of campaign-finance report amendments to old reports that Nuñez has filed in recent months, saying a number of questionable expenses have been deleted. She noted that checking the reports to the actual bank statements would show "whether he was eliminating them from amended reports to try to cover his tracks."

Asked whether the Secretary of State can check bank records, Ortiz said the agency doesn't have the authority to mandate that candidates supply supporting documentation, including bank records.

"Sometimes we request it, but that's as far as our office is able to go," he said.

Ortiz acknowledged that the campaign finance reporting system relies on the honor system to the degree that it's the candidates who must assure they're reporting actual financial numbers.

The Secretary of State's Office can issue fines and notices of violations to candidates, upon determining violations of state law have occurred. Candidates can challenge those in an arbitration process, according to state statute. Also, the office can refer concerns to the attorney general's office or a local district attorney for further investigation, either on a civil enforcement or criminal enforcement level, according to state law.